How Michigan's health care insurance exchange will work

Sep. 20, 2013

Written by

Robin Erb

Gannett Michigan

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Because Michigan lawmakers delayed action, the Michigan Health Insurance Marketplace, also called the exchange, will be operated by the federal government.

The U.S. Department of Health and Human Services (HHS) will run the exchange, as well as out-of-state call centers that will provide consumers with information. However, the Michigan Department of Insurance and Financial Services will retain oversight of the insurers and their licensing.

The Michigan Legislature has the option of gaining partial or full control of the exchange if it were to pass appropriate legislation. The state would need to apply to HHS for the change.

What will be available: This on-line marketplace will provide policies that are supposed to be more affordable to families and individuals. About a dozen insurance companies are offering as many as 150 plans that, for the most part, are assigned categories.

Platinum plans, the most expensive up front, will pay about 90% of medical expenses. Gold plans will cover about 80% of costs; silver plans about 70%, and bronze plans about 60%. In other words, the lower the premium cost up front, the higher the out-of-pocket costs later.

Anyone under 30 can purchase catastrophic health coverage instead of a regular policy to satisfy the requirements of the federal healthcare law. Such a policy will have lower premium and higher deductibles and co-pays. It will provide coverage largely in cases of a catastrophic injury, such as a car accident.

When to shop: The exchange opens Oct. 1. Consumers will be able to compare plans private insurers have at www.healthcare.gov or call 800-318-2596. They will be able to enroll in a policy on the same site.

You must enroll by Dec. 15 for policies to be effective Jan. 1. Enrollment will continue until March 31, but effective dates on policies will be delayed.

After March 31, you can buy policies on the exchange only in special circumstances. It will usually be within 30 days following certain life events. Among them: a change in family size through, for example, marriage, birth or adoption; a change in legal status to U.S. citizen or legal immigrant; or a move that opens up options for other policies on the exchange. Native Americans can enroll any time in the marketplace; they are not bound by enrollment periods.

Everyone enrolled can change policies annually during a limited enrollment period. Starting in 2015, the enrollment period will go from October 15 to December 7.

Small businesses — those with 50 or fewer full-time employees — will be able to access the policies also at www.healthcare.gov They will be directed to the Small Business Health Options Program (SHOP) Marketplace, or they can call 800-706-7893.

Like those buying insurance for themselves or their families, open enrollment for small businesses begins October 1. But unlike those buying insurance for themselves, enrollment does not end March 31; it continues year-round.

Who can buy insurance on the exchange: Generally, anyone who lives in the U.S. legally — including those with green cards and worker or student visas — and is not incarcerated can buy insurance on the exchange.

Applicants can’t be denied insurance based on pre-existing conditions. Additionally, insurers cannot set limits on 10 essential benefits — hospital care, regular doctor’s visits and prescription coverage, for example — that are required in the plans.

However, only those without affordable employer-sponsored insurance, those not eligible for Medicaid and those who have incomes below four times the federal poverty level will be eligible for federal credits. Those credits will help shrink costs for premiums. In 2014, an individual making less than $11,490 will fall below the federal poverty limit, and a family of four with a household income less than $23,550 will fall below the federal limit.

So under the health law, a family of four with an income below about $94,000 in 2014 — or four times the poverty limit — would qualify for credits.

U.S. citizens living in a foreign country are not required to get health insurance coverage under the Affordable Care Act.

Where to buy insurance: The insurance must be purchased online.You can do it on your own or federally certified staff will be available at many health clinics, other health care providers and community centers to help enroll applicants.

The complicated formulas for determining eligibility for tax credits or Medicaid will be automatically determined on the exchange once you input your information. You won’t need to grab a calculator .

You will need the following to enroll:

■ Social Security number (or document numbers such as those on green cards).

■ Employer and income information for each family member who needs coverage (such as a W-2 or a paystub).

■ Policy numbers for any current insurance.

■ Information on employer coverage, which can be gathered using the “employer coverage tool” found at www.healthcare.gov. (This paper doesn’t need to be submitted; it’s used as a worksheet to gather the necessary information from employers. Among the questions: Does the employer offer a health plan that meets the minimum value standard?)

How to prepare to apply: Consumers can’t purchase insurance on the exchange yet, but they can create a profile and sign up for text alerts at www.healthcare.gov. This same user name and password can be used to enroll in a plan starting Oct. 1.

The Kaiser Family Foundation, which tracks health-care policy, has created an interactive subsidy calculator based on premiums released in other states.

The calculator might help Michiganders better understand how much federal financial help they’ll receive to buy policies. However, it’s important to know that Michigan has not released its premium costs yet, so it’s not clear whether their plans will be similarly priced.

Why: Under health reform law, nearly everybody must carry health insurance or face a tax penalty that begins at $95, or 1% of annual income, for an individual the first year. A penalty of $47.50 is added for each child who is uninsured, up to $285 the first year. Penalties increase sharply in subsequent years.